Travel Food Services Limited — Q3 FY26 earnings call

Call held 13 Feb 2026

Management summary

TRAVELFOOD delivered a strong Q3 FY26 performance, characterized by robust system-wide sales growth and significant margin expansion. Despite temporary disruptions in December due to airline operational challenges, the company achieved a 35.3% increase in adjusted PAT. Management highlighted the successful mobilization of new units and the launch of tech-enabled services like the EATS platform as key drivers for future growth.

Highlights

  • System-wide sales grew 28.1% YoY to ₹875 crores, driven by 50+ unit mobilizations in the last 12 months

  • Consolidated sales reached ₹456 crores, representing 18.3% YoY growth

  • Adjusted PAT increased 35.3% YoY to ₹137 crores, reflecting strong operating leverage

  • EBITDA margin remained robust at nearly 40% for the quarter

  • Gross profit margins expanded to 83.9% from 82.1% in the previous year

  • System-wide like-for-like (LFL) sales growth stood at 12.5%, significantly outperforming passenger traffic growth of 1.6%

  • Footprint expanded to over 530 units across 19 airports with 30 new additions in Q3

  • Balance sheet remains strong with zero debt and a cash balance of nearly ₹800 crores

Key financials

  1. System-wide Sales ₹875 Cr +28.1%YoY
  2. Consolidated Sales ₹456 Cr +18.3%YoY
  3. Adjusted PAT ₹137 Cr +35.3%YoY
  4. EBITDA Margin 40%
  5. Gross Profit Margin 83.9%
  6. Cash Balance ₹800 Cr

What they filed

Q1 FY27: revenue up 10.9%, net profit up 37.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue283 326 306 313 292 +3%357 +10%340 +11%347 +11%
EBITDA107 130 122 132 127 +19%158 +22%173 +42%143 +8%
Net profit67 91 73 81 77 +15%111 +22%98 +34%111 +37%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Travel QSR
    52.5% Revenue Mix
  • Lounges
    41% Revenue Mix

Guidance & targets

Margin

  • PAT Margin Margin · Long-term · High confidence 25-28%
    But from a range perspective, I believe that we should be in the comfortable range of that 25% to 28%. We will continue to outperform that.

    — Vikas Vinod Kapoor, CFO

Volume

  • Passenger Traffic Growth Volume · Next 10 years · Medium confidence 7-9%
    I think the expectation on passenger traffic growth generally is the 7% to 9% range is what you generally hear, over the next decade or so of travel.

    — Varun Kapur, MD and CEO

Other

  • Lounge Maturity Timeline Other · Post-launch · High confidence 12-18 months
    And it tends to then, which is the exact 12 to 18 months which we normally allude to, that by 12 to 18 months we see it coming back to the normal level as the rest of the portfolio.

    — Vikas Vinod Kapoor, CFO

Risks & concerns

  • Airline Operational Challenges (FDTL Regulations)

    medium

    Crew rest regulations led to flight restrictions and short-term moderation in passenger volumes in early December.

    Management acknowledged

  • Contract Renewal Risk (Delhi T3)

    medium

    The Delhi T3 contract expires in September 2026 and will be subject to an open tender process.

    Analyst acknowledged

  • Seasonal Demand Volatility

    low

    Q3 is seasonally the strongest period; margins and sales may normalize in subsequent quarters.

    Management acknowledged

Areas of evasion (1)

  • Specific revenue numbers for individual JVs (SKPL and GHL) were not shared, though a broad aggregate was provided.

Q&A highlights

3 direct
Working Capital and Trade Payables Direct
So our trade payables are to our normal vendors... but a part of our trade payables is also for capex and some of the projects that we currently are underway... Another important point is, a part of our trade payables is also reflective of our lounge aggregation business.

Clarifies that high payables (₹330-340 crores) are linked to ongoing expansion capex and the specific business model of lounge aggregation rather than operational stress.

Asked by Naeem Patel

LFL Growth vs Passenger Traffic Divergence Direct
Normally somewhere like that's roughly, you normally see that upside being in that 9%, 10%, 11%, 12% range in terms of outperformance... And that comes through that combination of, A) yes inflation... but B) and importantly, our revenue enhancement that we drive.

Explains the sustainable 11% delta between traffic growth and LFL sales, driven by pricing power and innovative revenue initiatives like Food@Gate.

Asked by Vatsal Dujari

PAT Margin Sustainability Direct
Our PAT margin has been in the range of 27% in Q3, but it is a seasonally strong quarter... Our PAT margin has been in the range of 20% to 22%, before the share of the joint ventures and with the addition of the JV profitability, it kind of moves to the 25% to 26%.

Sets a realistic long-term margin expectation of 25-28%, acknowledging that the current 27-30% levels are seasonally inflated.

Asked by Akshay Krishnan

2 min read 5 chapters

Detailed narrative

Robust Financial Performance and Mobilization

TRAVELFOOD reported a 28.1% YoY increase in system-wide sales to ₹875 crores for Q3 FY26. This growth was primarily driven by the successful mobilization of over 50 units in the last 12 months, including 30 units added during the current quarter. Consolidated sales grew 18.3% to ₹456 crores, with adjusted PAT rising 35.3% to ₹137 crores, showcasing strong operating leverage and cost efficiency.

Strategic Footprint Expansion in Key Hubs

The company expanded its presence to 19 airports, operationalizing 14 new QSR outlets at Delhi Airport Terminal 2 and commencing operations at Navi Mumbai International Airport. Management secured a long-term 11-year contract for 33 units at Delhi Terminal 1 and is close to launching outlets at greenfield terminals in Noida and Guwahati. The brand portfolio now spans 140 brands, including premium additions like Gordon Ramsay Street Burger and Street Pizza.

Revenue Optimization and Tech-Enabled Hospitality

A key highlight was the 11% delta between LFL sales growth (12.5%) and passenger traffic growth (1.6%). This outperformance is attributed to revenue optimization initiatives such as the Food@Gate pilot, premium sleeping pods in Bengaluru, and automated cocktail dispensers. The EATS platform has been successfully rolled out, enabling direct bank-to-lounge access and marking a shift toward becoming a tech-enabled hospitality company.

International Growth and Joint Venture Performance

International operations in Malaysia and Hong Kong are showing strong recovery post-COVID, with a second Kyra Lounge recently opened at Hong Kong International Airport. Joint ventures contributed ₹44 crores to the profit line this quarter. While the Semolina Kitchens JV was deconsolidated in October 2024, management expects new terminals in Guwahati and Navi Mumbai to drive future JV profitability.

Sustainable Margin Profile and Long-Term Outlook

Management expects long-term PAT margins to stabilize in the 25-28% range, up from the historical 20-22% due to JV contributions and tech initiatives like EATS. Despite a temporary disruption in December traffic due to airline operational issues, January trends show a complete recovery. The company maintains a debt-free balance sheet with ₹800 crores in cash, providing significant flexibility for future bidding and highway QSR expansion.

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